Return on Investment (ROI) expresses the gain or loss made on an investment as a percentage of the amount put in. MoneySense defines a return as the gain or loss made from an investment — either income earned from the product, or the capital gain or loss on it.
Key takeaways
- A return is the gain or loss made from an investment: income earned from the product, plus any capital gain or loss on it.
- ROI restates that gain or loss as a percentage of the amount invested, which makes investments of different sizes comparable.
- Net returns are the amount earned less any losses and fees — sales charges, brokerage and manager fees all reduce the figure.
- ROI on its own says nothing about how long the money was invested, so the same percentage can represent very different yearly rates.
- MoneySense defines investment risk as the likelihood that the return is less than expected, and notes that all investments carry the risk of losing money.
See how this applies to your own figures.
ROI Calculator →How ROI is calculated
ROI divides the net gain by the amount invested and states the result as a percentage. The net gain adds together the investment income received — dividends from shares or unit trusts, or coupons from a bond — and the capital gain or loss on the product, then deducts fees and charges. A negative result means the investment lost value.
Gross return, net return and costs
MoneySense distinguishes the amount earned from a product from the net return, which is that amount less any losses and fees. Transaction costs such as sales charges, brokerage charges and manager fees reduce what the investor actually keeps, so an ROI worked out before costs overstates the outcome.
What ROI does not capture
- Time — an 18% ROI over one year and an 18% ROI over five years look identical, which is why annualised return exists
- Risk — MoneySense defines risk as the likelihood that the return is less than expected, and notes that every investment carries the risk of losing money
- Inflation — an ROI is a nominal figure unless the effect of rising prices is stripped out
- Cash flow timing — money added or withdrawn part-way through changes the amount actually at work
Key Return on Investment figures
| Item | Figure |
|---|---|
| ROI formula | Net gain ÷ amount invested, as a percentage |
| Components of return | Investment income plus capital gain or loss |
| Net return | Amount earned less losses and fees |
| Time period reflected | None — ROI is not annualised |
Figures as at 2026. Source: MoneySense.
Worked example
An investment of SGD 10,000 that is worth SGD 11,500 after fees and has paid SGD 300 in dividends has a net gain of SGD 1,800 — a capital gain of SGD 1,500 plus SGD 300 of income. That is an ROI of 18%. Because ROI carries no time period, the same 18% could have taken one year or ten.
Related terms
All Singapore glossary terms →Related calculator
Work out the return on an investment as a percentage of the amount put in, after costs.
This page is provided for educational and informational purposes only. It does not constitute financial advice. All figures and worked examples are estimates for illustrative purposes, are subject to change, and do not reflect any individual’s circumstances. Always refer to MoneySense and seek independent professional advice before making any financial decisions.